In line with Capital Market Authority requirements: compliance with the Capital Market Law and its Implementing Regulations, managing non-compliance risks, and strengthening the integrity of the business of listed companies and Capital Market Institutions.
What is legal compliance?
Legal compliance is an entity’s commitment to the laws, regulations, and instructions relevant to its activities, through effective policies, procedures, and controls, and an institutional culture that makes compliance part of day-to-day decision-making—thereby reducing the risk of violations and penalties.
The continuous compliance cycle
- Monitoring legislation
- Risk assessment
- Updating policies
- Oversight and inspection
- Addressing observations
A continuous cycle with no end—each remediation feeds into a new round of monitoring.
The Capital Market Authority regulatory framework
The framework is based on the Capital Market Law, its Implementing Regulations, and the instructions issued by the Authority. Applicable requirements vary by the entity’s status: a listed issuer, a licensed Capital Market Institution, or an entity preparing for an offering.
- Corporate Governance Regulations: the Board and committees, shareholders’ rights, and conflicts of interest.
- Rules on the Offer of Securities and Continuing Obligations: public and private offerings, and periodic and immediate disclosure for issuers.
- Capital Market Institutions Regulations: licensing, suitability, compliance and adherence, and safeguarding clients’ assets.
- Implementing Regulations of the Companies Law for listed joint stock companies: general assemblies, dividend distributions, and external auditors.
- Merger and Acquisition Regulations: acquisitions of listed companies and tender offers.
- Market Conduct Regulations: prohibition of trading based on inside information and market manipulation.
Scope of legal compliance services
- Monitoring regulatory requirements: tracking the Capital Market Law, its Implementing Regulations, and the Authority’s instructions and circulars on an ongoing basis.
- Reviewing policies and procedures: updating internal policies and controls in line with regulatory requirements and the nature of the entity’s activities.
- Assessing non-compliance risks: identifying risks arising from breaches and assessing their regulatory, financial, and reputational impact.
- Monitoring and reporting: assessing the level of compliance and preparing periodic reports for management and the Audit Committee on observations and required actions.
- Corrective actions: addressing non-compliance cases, following up on implementation of corrections, and reducing recurrence.
Why legal compliance matters
- Reducing regulatory and legal risks before they occur.
- Reducing the likelihood of violations, penalties, and fines.
- Protecting clients’ and investors’ rights and strengthening market confidence.
- Strengthening governance, internal control, and decision quality.
- Preserving the entity’s reputation and credibility with the Authority and the market.
The Capital Market Authority monitors issuers’ and Capital Market Institutions’ compliance with the Law and its Implementing Regulations. Its oversight covers governance, disclosure, market conduct, and investor protection. Proactive compliance is always less costly than remedying a violation.
Who do we serve—and how do we add value?
Entities preparing for an offering:
- Assessing regulatory readiness gaps before the offering.
- Transitioning into a joint stock company and building governance.
- Establishing policies, committees, and compliance registers.
- Aligning operations with the Authority’s and the market’s requirements.
Listed companies:
- Continuing obligations and periodic and immediate disclosure.
- Implementing the Corporate Governance Regulations and the regulations applicable to listed joint stock companies.
- Supporting general assemblies and related-party transactions.
- Addressing observations and avoiding repeat violations.
Capital Market Institutions:
- Building and activating the compliance function.
- Anti-money laundering and counter-terrorist financing policies.
- Preparing for inspections and responding to the Authority’s observations.
- Periodic reporting and ongoing suitability requirements.
Our methodology at AJ & Co.
- Defining requirements: identifying the legislation and regulatory requirements applicable to the entity’s activities and legal status.
- Assessing gaps and risks: reviewing compliance gaps against the Authority’s requirements, assessing risks, and prioritizing actions.
- Remediation and development: reviewing and enhancing policies, procedures, and internal controls through a practical remediation plan.
- Monitoring and reporting: ongoing mechanisms for monitoring, reporting, and keeping pace with regulatory updates.
Effective compliance starts with understanding legislation and ends with protecting the entity and strengthening the Authority’s and investors’ confidence in it.
